Marie Kondo can make 37 pairs of shoes disappear, but she can't
stuff millions of oil barrels into a wicker basket. There's just no
place to store the stuff.
Some traders are sending barrels on a leisurely cruise aboard
very large crude carriers (literally, VLCCs). "Many traders are
betting that the coronavirus pandemic will run its course and
demand for oil will jump later this year," the
WSJ explains.
Six-month VLCC leases have risen to an average of $100,000/day
from around $29,000 a year ago.
Sounds steep...but companies that have the liquidity and
capacity could make ~$16 of profit per barrel after storage
costs.
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Why can't they hold onto
all the tankers followed through
Posted by Walt on 21st of Apr 2020 at 01:05 pm
Why can't they hold onto it?
Marie Kondo can make 37 pairs of shoes disappear, but she can't stuff millions of oil barrels into a wicker basket. There's just no place to store the stuff.
Some traders are sending barrels on a leisurely cruise aboard very large crude carriers (literally, VLCCs). "Many traders are betting that the coronavirus pandemic will run its course and demand for oil will jump later this year," the WSJ explains.